Homefront needs to sell 2m to break-even; next two "significant growth" years for publisher

Publisher THQ is to spend at least $50 million on its upcoming MMO Warhammer 40,000: Dark Millennium Online, due for release in the fiscal 2013 year.

Speaking at the Wedbush Morgan conference last night, executive vice president and chief financial officer Paul Pucino detailed the company's roadmap for the next two financial years, where he expects 2012 and 2013 to provide "significant growth" after a year of investment.

"The production budget is high-end of a core game," he said of the MMO. "Somewhere in the area of $50 million or so to get these games to market, certainly in that range for Dark Millennium. What you want is a game like this to be successful and the development budget gets higher."

"It can continue to generate over a long period of time - 5,6,7, 8 years of high operating margins and a significant amount of cash," he said of projected profits.

However, he would not go into any detail on the amount of subscribers the company is targeting.

"We haven't gotten specific yet, we're a couple of years away here from release and certainly as we get closer we'll give some specifics with regards to break-even or target users. "

He also revealed that upcoming first-person shooter Homefront - along with the majority of new owned IP - will need to sell over 2 million units for it to break-even.

"When you just think in terms or profitability, the owned IP, there's a threshold of break-even of about 2 million units per game, so you have to sell somewhere in the area of 2 million copies of a game like Homefront to break even. Once you get past that you're generating incremental operating margins as high as 60 per cent," he offered.

The publisher sees the Xbox 360 and the PlayStation 3 as key formats for growth over the next three years, with THQ planning to introduce 1-2 new games each year, with sequels to games every 2-2.5 years.

It's U-Draw tablet will see first-party software released every 3-4 months to "re-promote" the peripheral, and it now expects to sell 1.7 million units for the fiscal 2011 year.

Pucino said that historically 60-70 per cent of the company's profits have been from licensed IP, but with a renewed push in owned franchises, getting an even 50-50 split "would be something very appealing to us."

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2 million copies just to break even?! For Christ's sake, that's ridiculous for a new IP.

Good luck to them though; they definitely have the right attitude towards the company's growth. It will be interesting to see more of Dark Millennium as it approaches launch - particularly given that developers Vigil have only worked on one game previously (Darksiders) and despite shed-loads of potential the Warhammer games have never really been very successful at retail (of particular note being Age of Reckoning).

People making 40K games need to stop with the silly bs and actually get a good and proper tactical shooter going. Dawn of War was amazing but DC and SS declined it quite a bit. DoW 2 had a fun campaign but sillyness skyrocketed to the point that was all that's left (haven't played Retribution yet, heard it's much better).

Although the time when they did try a tactical shooter that was Fire Warrior and it was obviously made by people who do not understand anything about shooters. Well, we'll see how THQ handles this but their choice of genre has not impressed me at all. I can easily see much of my searing hatred for WoW being applied to this for similar reasons.

2 million to break even is why so many studios are closing this generation. Only the biggest of studios can handle one or two below par before money issues start to cause trouble and because that's what the big studios are doing, the middle guys have to either spend all their budget on marketing just to compete or downsize. The little guys are being relegated to the mobile space or DD and are lucky to get a product onto retail anymore.

Good luck, THQ. Can't say I've been excited by much of your decisions this generation to begin with and I don't see this one working out for you either.

It's worth remembering that the reason why the vast majority of Games Workshop related videogames have tanked at retail is because with the exception of THQs Dawn of War they've almost all been entirely awful.

It's never had anything to do with the IP, the games were just plain BAD. I remember owning firewarrior. The voice acting, the art and feel of the game were never the issue, the problem was the fact that as an FPS it didn't compare to any comparable title at the time. The level were generally linear, the gameplay repetitive and completely predictable. It felt incredibly dated, not to mention cheap.

WAR was a great idea badly executed by Mythic when they messed up the PvP and completely under utilized the engine.

THQ managed to make a VERY good job with the Dawn of War series and I wish them every luck with the MMO. Just hope it lives up to the 50 mill price tag

I still don't understand why studios won't spend up to 300 million on an MMORPG?

Think of how movie studios make movies like WaterWorld or Avatar, and how much each of these cost. Sure Waterworld tanked at first, but later made all its money back in the least. I think that people want high quality blockbuster titles with outstanding gameplay. Avatar only lasted a couple hours or more, but MMO's have days of content to them! I really don't get why people aren't seeing MMO's as the future entertainment medium that all will want to be a part of.

In my opinion EA and Bioware have the right idea with Star Wars The Old Republic. You need to have fully voiced MMO's with tons of choices like that in order to take the genre forward. You have to be willing to make huge environments, with tons of exploration content. No aspect can be left undone, even though MMO's are newer what I see here are fully interactive entertainment packages.

They are high quality in story and in interaction much like a movie might be. The only downside right now is that you really have to go the cartoonish route to apeal to as wide a base as possible, but that doesn't mean you should cut any corners visually.

Edited 1 times. Last edit by Christopher Willis on 10th March 2011 9:26pm

I like Trion's strategy with their SyFy game they are making. That might not be a bad idea honestly. Work together with a known cable network or one of the big studios in Hollywood to make a game and release a movie or show for it. StarGate went from movie to TV show, so who's to say a TV show or movie can't be made into an MMOG?
That might help bring more attention to it at least. I mean heck the only reason I even heard of Stargate Worlds is from watching Stargate Atlantis and seeing the advertisement for it.